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Thursday, 22 September 2016

Tanzania: Digital Payments to Raise Taxes By Sh1 Trillion

Dar es Salaam —
Digital payments of Value Added Tax (VAT) and support from business
formalisation are expected to see Tanzania increase annual revenue
collection in taxes to Sh1.03 trillion, a new report by United Nations
on digital payments shows.

In a statement
availed to The Citizen by Better than Cash Alliance head of
communications Angela Corbalan said, while many emerging economies were
grappling with how to modernise their economies, improve transparency,
drive sustainable growth and advance financial inclusion, a study on
Tanzania's digital payments revealed achievements.

"The country's
tourism sector has reduced economic leakages in areas of conservation
park entry fees by 40 per cent after replacing old revenue collection
methods with electronic payment," reads part of a statement.

The Better than
Cash Alliance established under the United Nations Capital Development
Fund (UNCDF) says digitising payments has enabled the country reduce
bureaucratic inefficiencies, including reducing import customs clearance
from nine days to less than one. The new payment system has increased
transparency between citizens and the government and people are being
protected against fraud.

According to the
report, Tanzania entered into partnership with the country's Traders
Association to subside costs of purchasing the Electronic Fiscal Devices
(EFDs) being among the measures of overcoming obstacles of adopting the
person-to-government (P2G) and business-to-government (B2G) payments.

"The decision was
reached after small-scale traders refused to digitise their
point-of-sale payments by incurring full costs electronic billing
machines," reads the statement.

Report says digital payments have been helpful in driving social inclusion and helping women become independent.